Monopolistic Competition Of Apple

By making their products differentiated from the competition, Apple can establish their own price. Apple believes that people will pay some more money if they know that what they are buying is better and more reliable. That is also the reason why Apple sells the same products all over the world, making no selection or differentiation depending on where the market takes place. The high costs of Apple’s products are the one of the reasons why Apple Inc. preferred to be

dominant incumbent even if the incumbent priced its products substantially above competitive levels for a significant period of time” (“Microsoft: Court’s Findings…). Obviously, the rival companies such as, IBM and Apple, have found great fact, that

Smartphones are a mobile technology that utilizes an advanced operating system in portable devices. Currently, the advanced operating systems employed on smartphones are IOS and Android. IOS was developed by Apple and is exclusive to its mobile devices only. However, Android is an open source operating system that is utilized by various smartphones on the market. Nevertheless, current smartphones employing either operating system encompasses the capabilities of a cell phone, camera, computer, mp3 player, external hard drive, GPS, and internet connection. This collection of technology on one device makes it very advantageous for businesses and convenient for individuals. According to Smith (2015), this is supported by the fact that 64% of American adults have a smartphone for various tasks.

Monopolistic competition describes a marketplace offering differentiated products, and as such are not perfect substitutes. This is found in restaurants, shoes and other preference-driven goods. Such firms find a high elasticity of demand (in the long run), likely excess profits in the short term, and price setting available to them (as there are no perfect substitutes for their products; competitor prices are ignored).

In this paper, we will discuss the four market structures of Monopoly, Oligopoly, Monopolistic Competition and Pure Competition. We have identified four companies that operate in each of these market structures: Salt River Project, The Coca Cola Company, Russ 's Market, and Columbia House. In each market structure we will describe the pricing and non-pricing strategies of the companies operating in that market. We will also examine Quasar, a notebook computer company. They entered the market with a new product and we will explain the progress from one market segment to the next as the lifecycle of the product changes and the number of

4.     Threat of Product Substitutes: In today’s society being first to market is one of the best ways to obtain market share and it forces competitors to catch up while you continue to innovate. Apple was successful at doing this with the i-Pod, where competitors are just finally catching up although they might be too late. The computer industry was completely saturated with substitute products Apple found a new industry to compete in which allowed it to diversify itself.

Even though Apple has encountered many setbacks, it continues to bring new and improve products to the market. Apple’s competitive strategy has been innovation. They have made an extraordinary effort developing, implementing, and executing its very unique strategy through innovation which has resulted in new product, and the enrichment of the existing ones. More specifically, Apple attempts to meet and supply the needs of a global market, by offering eager and enthusiastic consumers with innovated and high-quality products and services. Apple has employed a differentiation strategy linked to innovation with its three core products (computers, personal media player, mobile phones, tablets and other accessories). A key piece of their strategy involves meeting the needs of the converging digital electronics and computer markets. Apple has elected to implement its strategy by designing and developing proprietary operating systems and software technologies, thus allowing for strict protection of its intellectual rights.

Finally, oligopoly is the final market structure. Oligopoly is an important market meaning that there are a few businesses that is credited for developing and selling equal goods or services. In a more simpler explanation, it is a market situation in which competition exists between the two. It is therefore identified as a kind of imperfect market situation where there are limited firms in the market and they are acknowledged for creating identical goods or services or they account for producing products which are close but not the flawless substitute of each other. A study of this market type shows that there are specific major exclusive characteristics of this market

In the smartphone industry, the competition is characterized by the operating system that the devices use. Thus, when n the industry was first evolving out of the personal digital assistant industry, there were only two main players, the Palm and the Blackberry. Apple entered the market and brought with it a whole new set of consumers to a product that was initially seen as a tool for business. Palm's popularity declined, but there were other new entrants ranging from Windows to other proprietary systems and of course to Android. Now, the smartphone industry had evolved into a state of monopolistic competition with half a dozen platforms all competing for the hearts and minds of consumers. However, the industry is once again shifting back to duopoly status, with RIM being marginalized and Apple and Google being the only two players that matter.

In monopolistic competition, each firm is the sole producer of a particular brand or product. It is a market structure whereby there is competition among a large number of monopolists. Example of monopolistic competition is smart phones market. In the market, there are many brands like Nokia, Samsung, HTC, Apple and etc. All these brands seems to have full competition, with numbers of brand and freedom to entry.

Next, is Monopolistic Competition. This type of market structure is a combination of both a monopoly and perfect competition. The industry will be made up of numerous companies who have "substitute products" but whose products may have special features or benefits which enable them to differentiate themselves from their competition (Gilani, n.d.). In addition, the readiness of buyers to purchase these products allows new businesses to easily enter the industry (Reynolds, 2005). An example of monopolistic competition would be in the fast-food industry, specifically the pizza market (Gilani, n.d.).

Apple operates with fierce competition in the consumer electronics segment which comes in many different forms. There are a large number of competitors in the different market niches who offer many similar products. Furthermore, many of these competitors' products are priced much less than an Apple branded products. Just as soon as Apple releases a new product, major companies begin imitating it immediately. In the personal computer industry, market pressure is continuously being exerted from such companies such as IBM, Dell, HP, and Toshiba (Wildstrom, 2009). Furthermore, with its flagship product the IPhone, Apple competes with companies like HTC, Palm, Blackberry, and Motorola (Wortham, 2011). Apple has had significant success despite the competitive environment because Apple commands a brand loyalty and dedication to innovation that few companies have ever achieved.

The customers bargaining power is another force that presents a competitive pressure on companies in this industry. Customers are more interested on the brand identity with much preference on the emergent ones. They tend to be loyal to price elasticity and hence companies are left to compete in cutting costs. Obviously, consumers will go for products with low prices and therefore companies such as Apple would not risk being expensive. The more expensive a company’s products are the less the number of buyers received. Immediately a substitute enters the market, everything to do with the existing products becomes competitive. Consumers are left to make considerate choices between the product and its substitutes. The Smartphone & Tablet industry is characterized by emergent of various brands within short ranges of time. These brands become substitutes and affect the pricing strategy adversely. This is a force that Apple and the other companies have to deal with as far as their survival in the market is concerned.

In contrast to standard mobile phones, “smartphones” are powerful computing devices offering traditional wireless voice service as well

Apple Inc.: Apple relies on a couple of strategies allowing it to charge high prices despite low costs.